Old woes beset new mortgage-relief program

Published: Wednesday, November 6, 2013 at 1:00 a.m.

Last Modified: Tuesday, November 5, 2013 at 8:56 p.m.

The agency administering Florida's new $350 million mortgage- principal-reduction program has been inundated with complaints similar to those aimed at earlier foreclosure aid efforts.

Underwater borrowers who have turned to the Florida Housing Finance Corp. for help to reduce mortgage balances have had difficulties filing application paperwork.

Others say contacting local counselors assigned to them, or getting through on the program's statewide hotline has been extremely difficult.

Homeowners say they worry the delays will make it more difficult to stay current on mortgages, a goal of the principal-reduction program.

State officials say the program has had only minor delays in processing the 25,000 applications that have come in and urge homeowners to be patient.

The problems come during a federal investigation into the program's previous foreclosure rescue efforts prompted by congressional complaints that it was poorly run and that $1 billion in tax support was not reaching enough people.

Some now worry the Hardest-Hit Principal Reduction Program is following a similar path.

"All of the programs meant to help housing so far have been under-funded or mismanaged," said Jack McCabe, a Florida real estate consultant. "The people that need the money remain in emotional and financial crisis, wondering if the bank is going to take their homes."

25,000 apply in Florida

Nearly 1,130 underwater homeowners in Southwest Florida applied for a share of the $350 million in Hardest-Hit grant money, including 431 borrowers in Sarasota, 424 in Manatee and 274 in Charlotte counties.

In all, 25,000 borrowers across Florida have applied to the program, which offers $50,000 breaks on loan principal.

It was designed to help Floridians current on their mortgages but who owe more than their homes are worth.

Nearly 109,000 borrowers in Southwest Florida -- about one-third of the region's homeowners -- are still considered deeply underwater on home debt.

The program was open to Florida homeowners who owe 25 percent more in mortgage debt than the current value of their primary residence, as long as the outstanding principal was below $350,000.

Borrowers must also earn household incomes of less than 140 percent of the area median. For a family with two working adults in Sarasota-Bradenton, that would be $67,200.

The program is part of a $1 billion initiative to help homeowners avoid foreclosure.

Criticisms have plagued it for nearly two years.

Earlier this year, U.S. Sen. Bill Nelson, D-Fla., called for an audit of the Florida Hardest Hit Fund -- part of the national Troubled Asset Relief Program -- citing poor administration.

Money not used yet

A recent federal report also showed that while the $7.6 billion Hardest Hit program was expected to help as many as 546,562 homeowners in 18 states, to date states have allocated just 22 percent of their funds -- while spending $1 billion on administrative costs.

As of June 30, Florida had used 13 percent of its $1 billion, providing mortgage payments to 7,334 homeowners. As many as 50,000 Floridians were expected to receive help under the program, according to an Inspector General's report.

The Florida Housing Finance Corp., which administers Hardest-Hit, maintains it has been largely successful.

The agency says it has provided more than $205 million in assistance, including about $2.7 million between Sarasota, Manatee and Charlotte counties, records show.

State officials also contend that reports of delays have been overblown, attributing slowdowns to the sheer number of applicants. Statewide, 70 advisers are tasked with processing requests.

The agency could not specify how many of 25,000 applicants have been approved, denied or were still waiting.

Cecka Rose Green, a spokeswoman for the Florida Housing Finance Corp., said application approvals take about 30 days. The agency expects to mail a first-round of checks to lenders on behalf of homeowners later this month.

"I know everyone is anxious because this money is distributed on a first-come, first-serve basis, but we are just asking them to be patient," Green said. "There are a lot of applications."

One example

Eileen Cohen this year lost her job as a receptionist that paid about $10 an hour.

Struggling to hang onto her home, the 82-year-old Pembroke Pines woman could not qualify for a loan modification with her mortgage lender, so she applied for Hardest-Hit the first day its Web portal opened.

Cohen logged on to find a glitch had crashed the system within a few hours, but she finally completed the 13-page application.

Days later, she received a response from the Urban League of Palm Beach County, notifying her that it had received her application from the state, and that the qualification process would take seven to 10 days.

More than a month later, Cohen still has not heard back. She has not been able to reach the counselor assigned to her case, either, despite leaving several voicemails. On the program's hotline, no one has been able to answer her questions.

In limbo, Cohen and her family have grown increasingly frustrated.

"I'm sure they're busy, but it would be great to at least get a note saying we're working on it, and we'll get back to you," said Larry Cohen, Eileen's son.

<p>The agency administering Florida's new $350 million mortgage- principal-reduction program has been inundated with complaints similar to those aimed at earlier foreclosure aid efforts.</p><p>Underwater borrowers who have turned to the Florida Housing Finance Corp. for help to reduce mortgage balances have had difficulties filing application paperwork.</p><p>Others say contacting local counselors assigned to them, or getting through on the program's statewide hotline has been extremely difficult.</p><p>Homeowners say they worry the delays will make it more difficult to stay current on mortgages, a goal of the principal-reduction program.</p><p>State officials say the program has had only minor delays in processing the 25,000 applications that have come in and urge homeowners to be patient.</p><p>The problems come during a federal investigation into the program's previous foreclosure rescue efforts prompted by congressional complaints that it was poorly run and that $1 billion in tax support was not reaching enough people.</p><p>Some now worry the Hardest-Hit Principal Reduction Program is following a similar path.</p><p>"All of the programs meant to help housing so far have been under-funded or mismanaged," said Jack McCabe, a Florida real estate consultant. "The people that need the money remain in emotional and financial crisis, wondering if the bank is going to take their homes."</p><p><b>25,000 apply in Florida</p><p></b></p><p>Nearly 1,130 underwater homeowners in Southwest Florida applied for a share of the $350 million in Hardest-Hit grant money, including 431 borrowers in Sarasota, 424 in Manatee and 274 in Charlotte counties.</p><p>In all, 25,000 borrowers across Florida have applied to the program, which offers $50,000 breaks on loan principal.</p><p>It was designed to help Floridians current on their mortgages but who owe more than their homes are worth.</p><p>Nearly 109,000 borrowers in Southwest Florida -- about one-third of the region's homeowners -- are still considered deeply underwater on home debt.</p><p>The program was open to Florida homeowners who owe 25 percent more in mortgage debt than the current value of their primary residence, as long as the outstanding principal was below $350,000.</p><p>Borrowers must also earn household incomes of less than 140 percent of the area median. For a family with two working adults in Sarasota-Bradenton, that would be $67,200.</p><p>The program is part of a $1 billion initiative to help homeowners avoid foreclosure.</p><p>Criticisms have plagued it for nearly two years.</p><p>Earlier this year, U.S. Sen. Bill Nelson, D-Fla., called for an audit of the Florida Hardest Hit Fund -- part of the national Troubled Asset Relief Program -- citing poor administration.</p><p><b>Money not used yet</p><p></b></p><p>A recent federal report also showed that while the $7.6 billion Hardest Hit program was expected to help as many as 546,562 homeowners in 18 states, to date states have allocated just 22 percent of their funds -- while spending $1 billion on administrative costs.</p><p>As of June 30, Florida had used 13 percent of its $1 billion, providing mortgage payments to 7,334 homeowners. As many as 50,000 Floridians were expected to receive help under the program, according to an Inspector General's report.</p><p>The Florida Housing Finance Corp., which administers Hardest-Hit, maintains it has been largely successful.</p><p>The agency says it has provided more than $205 million in assistance, including about $2.7 million between Sarasota, Manatee and Charlotte counties, records show.</p><p>State officials also contend that reports of delays have been overblown, attributing slowdowns to the sheer number of applicants. Statewide, 70 advisers are tasked with processing requests.</p><p>The agency could not specify how many of 25,000 applicants have been approved, denied or were still waiting.</p><p>Cecka Rose Green, a spokeswoman for the Florida Housing Finance Corp., said application approvals take about 30 days. The agency expects to mail a first-round of checks to lenders on behalf of homeowners later this month.</p><p>"I know everyone is anxious because this money is distributed on a first-come, first-serve basis, but we are just asking them to be patient," Green said. "There are a lot of applications."</p><p><b>One example</p><p></b></p><p>Eileen Cohen this year lost her job as a receptionist that paid about $10 an hour.</p><p>Struggling to hang onto her home, the 82-year-old Pembroke Pines woman could not qualify for a loan modification with her mortgage lender, so she applied for Hardest-Hit the first day its Web portal opened.</p><p>Cohen logged on to find a glitch had crashed the system within a few hours, but she finally completed the 13-page application.</p><p>Days later, she received a response from the Urban League of Palm Beach County, notifying her that it had received her application from the state, and that the qualification process would take seven to 10 days.</p><p>More than a month later, Cohen still has not heard back. She has not been able to reach the counselor assigned to her case, either, despite leaving several voicemails. On the program's hotline, no one has been able to answer her questions.</p><p>In limbo, Cohen and her family have grown increasingly frustrated.</p><p>"I'm sure they're busy, but it would be great to at least get a note saying we're working on it, and we'll get back to you," said Larry Cohen, Eileen's son.</p>